Difference between private and business car insurance

Are you going to take out car insurance? Then you will be asked whether you use the car for private or business purposes. The use of the car often influences the premium. Some insurers only insure cars for private use. We list the differences between private and business car insurance so that you can make the right choice.

What is business car insurance?

Private car insurance is often cheaper than business car insurance, but insuring your car for business offers various benefits. This way, you have the option to let different drivers drive. If you take out business insurance, you can choose to settle the VAT. Because the damage is also paid out, exclusive of VAT, you pay a lower premium in this case.

Need business car insurance?

You only sometimes need business car insurance. Commuting to and from work always falls under private use of the car. Even if you only drive the car once for business, you can indicate that you drive privately when taking out the car insurance policy. So if you use the car almost exclusively for commuting, private car insurance is sufficient.

You use your car for business if you use it for goods transport, paid passenger transport, courier services or if you have a driving school. A company car that is on your balance sheet must always be insured with business car insurance.

Business car insurance for the self-employed

As a self-employed person, if you have a delivery van or van with a gray license plate , this will in principle always be insured for business purposes. A vehicle with a gray license plate always falls under business assets. Despite the fact that the premium of a business insurance is higher, it is often interesting from a tax point of view to drive a gray license plate. For example, you get an exemption from the bpm , the tax on passenger cars and motorcycles. You can also deduct the VAT on the purchase of the delivery van. You also pay a lower road tax rate.

There are some snags associated with the exemption from bpm. The share of business trips must be 10% or higher. You may also wait to convert the van into a passenger car or sell it before it is five years old. When taking out business car insurance, it is sometimes possible to offset the bpm, resulting in a lower premium.

You can take out collective car insurance if you have a larger company with several cars. You make agreements about the insurance conditions, additional coverage and the deductible. The premium per car is often lower. In addition, you can also insure private cars at an affordable price.

Third-party liability or more extensive coverage?

Liability insurance (WA) is mandatory. With a WA limited hull insurance you also insure damage that comes from outside, such as window damage, burglary, fire or theft. With a WA full hull coverage, the damage you cause yourself is also covered. Which insurance is useful for you depends, among other things, on the type of car you drive and the risk you can bear.

You can take out additional insurance with a business car insurance policy. Think of extra insurance for the occupants or legal assistance insurance. If you have a lot of expensive items in your car, such as tools, you can take out more extensive coverage for this. Sometimes you also get free roadside assistance or replacement transport with an insurance policy.

How much does business car insurance cost?

There is no clear answer to the question of how expensive business car insurance is. As with private insurance, you can choose from different coverages. You can also insure the company car additionally.

Finally, the number of claim-free years also plays a role in the amount of the premium for your business insurance. So you build up a no-claim.

Which business car insurance best suits you as an entrepreneur also has to do with the risk that you can bear. Do you want the purchase value back if your car is declared a total loss, or do you prefer cheap business car insurance?

Auto insurance business use explained.

Some car insurers only accept cars intended for private use. Most insurers allow business trips, as long as you do not use the car for more than 10% for business purposes. Insurers sometimes want you to be able to demonstrate this. Conversely, a business car insurance policy usually also covers private use.

The industry in which you operate also influences what the insurer allows. If you occasionally use your car for taxi transport, you can hardly escape business car insurance. If you have an accident, your occupants are insufficiently protected with private car insurance.

Frequently asked questions about business car insurance.

Do I need to take out business car insurance?

There often needs to be a clear answer to this. You need business car insurance if you transport goods for work (for example, as a courier or delivery person) or when you transport people. You don’t need business auto insurance if you only use your vehicle for commuting.

A rule of thumb is that you can insure your car privately if no more than 10% of your trips are business. Your insurer may require you to demonstrate this.

A car that is on the balance sheet of your company must always be insured for business purposes. Are you unsure whether you are properly insured? Then contact your insurer.

Can I also opt for limited hull or all-risk with a business car insurance policy?

Of course. Just like with private car insurance, you also choose which cover you need with the business variant. Public liability insurance is mandatory. You can also take out insurance for damage caused by external influences, such as fire or vandalism. This is what you call limited hull coverage.

Finally, you have the option of taking out an all-risk insurance policy. The damage you cause to your own car is also covered. Taking out all-risk insurance is wise if you cannot bear the risk of major damage to your company car.

Finally, you can take out additional insurance. This way, you can insure the goods in your van against damage or theft. Additional insurance for occupants may also be necessary, depending on the type of work.

How much does business car insurance cost?

The premium for business car insurance depends on several factors. The first is the cover. Third-party liability-only insurance is the least expensive, but it may not provide adequate protection in your particular situation. A full hull cover for a new, expensive car is a lot more expensive than an older van.

In addition, you can expand the insurance on your company car with additional coverage if desired. This way you can also insure the goods in your company car. You can also take out insurance for the occupants.

Finally, like with private car insurance, claim-free years also count. The more claim-free years, the higher your no-claim discount.

Can I also insure the items in my company car?

Many entrepreneurs insure the items in their company car with additional insurance. The goods are then not only insured for damage against theft but also against damage during loading and unloading.

An insurer may, however, impose additional requirements on how the items are transported. Many insurance companies require that you do not store the goods separately but in lockable cupboards, for example. If you have employees, it is therefore very important that you instruct them about these requirements.

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